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Budget 2020: Center Needs to Hike Utilization to Improve Rural Exigency

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Union Budget 2020 India: Fertilizer subsidies should also be passed directly to farmers under the DBT, but only those under the poverty line should be allowed to receive the ever-growing food subsidies. If the government raising the budgetary allocation in the sector, the agricultural sector will play an important part in bringing India out of its current economic downturn. In an interview, Pushpendra Singh, the president of Samrat Sharma, said: ' The Agri sector that employs a majority of the population is severely depleted of funds '.

Budget 2020: Center Needs to Hike Utilization to Improve Rural Exigency
 

The overall expenditure is nearly Rs 27,86 lakh crore for the Union budget 2019-20. Of that, Rs 1.18 lakh crore is the allocation to the Ministry for Rural Development, Rs 1.38 lakh crore for the Ministry of Agriculture, Rs 2.932 for animal husbandry, and for the grant of fertilizers, Rs 80.000 crore was allotted. When we add all of these, it is just about Rs 3.4 lakh crore, around 12% of the entire budget. Because 70% of the residents live in rural locations, this allocation should be significantly increased.

Considering that rural areas contribute about 30% of GDP and agriculture about 15% of GDP, any enhancement of demand necessarily implies assuming that rural people are supported with more income. Consequently, rural areas need to be focussed more on strategies and resource allocations in order to boost competition. The PM-KISAN scheme launched last year gives a Rs 6,000 annual payment per family farmer. On the last budgetary year 2019-2020, it was allotted a sum of Rs 75,000 crore, but the State will not be able to spend this money this year because of the level of disbursement.

Budget 2020: Center Needs to Hike Utilization to Improve Rural Exigency

In the current budget, we will expect a recovery of demand in the economy if the money payable by the scheme is raised to Rs 24,000 per farmer family per annum. Apart from this farmers were told that they would be granted one and a half times the cost of producing their output. Moreover, just one-and-a-half times the A2+FL production cost, which is the total cost of their goods as per the CACP figures, are reported as MSP and not C2. Around one-third of farm income comes from livestock and related activities, but this is a very overlooked market.

Unusually, animal husbandry is not even considered a part of farming and its revenue is not tax-exempt. I assume that the Ministry of Agriculture's budget will reach at least 30%, i.e. approximately Rs 40,000. The domestic corporate income tax was cut from 30% to 22% last year. Yet interestingly enough, these farmer's organizations are still paid at the old rate of 30%. Such farmers ' cooperatives were paid with income tax at a pace of 5 per cent greater than the producers ' level by 2005-06. The former model of five per cent lower tax rate in this budget should, therefore, be restored than that for the companies belonging to these farmer organizations.

Budget 2020: Center Needs to Hike Utilization to Improve Rural Exigency
 

Since the current rate for enterprises is 22 per cent, these farmer co-operatives should not be paying more than 17 per cent of income tax. The cabinet might also spend a considerable amount of cultivation, the cold chain and other warehousing facilities. Instead of other plants in which excess production causes other issues, oilseeds and pulses should be promoted. We can, therefore, come out of this economic slowdown by relying on our growers and rural areas.

Read more about: budget 2020 union budget 2020
Story first published: Saturday, February 1, 2020, 11:04 [IST]
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